Tag Archives: KPIs

Every activity that doesn’t add Value for the Customer costs you money. Money that increases cost, reduces margin and makes you vulnerable to leaner competitors.

It’s the tax that you pay for inertia and inefficiency. And it’s the tax that keeps on taking. Every day that you aren’t implementing Lean. Every day that you lose focus on improvement. Every day that you keep on doing what you’ve always done.

With labour and materials costs continuing to rise, and customers wanting price reductions, it’s the tax that you must avoid. In fact, reducing Waste-Added Tax should be part of everyone’s daily activities.

Here’s a suggestion: show WAT as a line in your Management Accounts. Measure it, publish it, hold people accountable, set targets and apply your problem-solving process to reducing it.

For decades now manufacturers have measured their performance in terms of Quality, Cost and Delivery. These days that’s no longer good enough. If you really want to raise your game here are some measures you need to be thinking about:

Cx – Customer Experience. The customer’s total life-time experience of your products, services and brand. Think customer journeys, Net Promoter Score, Fault-Free Years in Service and the like. Talk with them, partner with them, have the difficult conversations, grow old together.

Value-Add. This goes to the heart of what manufacturing is all about – taking a whole load of inputs and resources and turning them into something more valuable. Value-add per employee is a critical measure of productivity. At the plant level, it’s one of the “critical few” measures, and at a national level increasing productivity is the only real way to improve living standards.

Responsiveness. Simply delivering a product “on time” (which date exactly?) doesn’t really cut it. How agile and responsive are you to customer needs? Do you know exactly what’s important to your customer? Can you flex volumes, delivery times and specifications? Do you need to offer guaranteed lead-times, short lead-times or both?

If you’d like an up-to-date, independent review of your KPI’s and objectives, contact Andrew.Nicholson@ImproveMyFactory.com

Expectations detemine outcomes, Expectations motivate us, Expectations keep us on track. So it’s no secret that the best organisations – and the most effective Leaders – are all over this.

So here are some simple tips – aimed here mainly at manufacturers.

Long-term: make sure everyone clearly undertands the common goals of the organisation and why you do what you do. Is there an answer to “Why am I here” and “What’s in it for me”?

Medium-term: spell out the three most important goals this year, this quarter. Back them up with SMART objectives for each and every team member (Specific, Measurable, Achievable, Relevant, Timescaled).

Short-term: provide simple visual “target and actual” measures in each workplace. Every team member needs to see for themselves what’s required and how well they are doing. At the end of each shift / day / week every team member should know – without waiting to be told – how well they’ve done, and what they need to focus on next time.